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Property tax hearing, 4.24

Revenue Committee Chairwoman Lou Ann Linehan answers questions during a combined hearing of the Legislature's Revenue, Education and Retirement committees in late April on her committee's tax reform plan. 

The Legislature's Revenue Committee on Friday made substantial progress in revising its tax reform package to address concerns expressed by its opponents in an effort to fashion a filibuster-proof plan.

In other action, the committee sent to the floor an amended version of Gov. Pete Ricketts' proposed constitutional amendment to place a 3% limit on annual property tax increases after transforming the measure (LR8CA) into a proposed statutory change.

Under that proposal, any such increase would need approval by a majority of voters at a special election.

That amended plan cleared the committee on a 5-1 vote.

But most of the action during a three-hour executive session was directed at attempting to develop a package to provide substantial property tax relief that can gain the support of at least 33 of the Legislature's 49 members in order to break through a filibuster waged by its opponents.

The measure would then require at least 30 votes to override a certain gubernatorial veto.

Revenue Committee Chairwoman Lou Ann Linehan of Elkhorn told the group that she believes the pathway to 33 votes can open if the eight diverse members of the committee are able to agree on a revised tax reform plan.

The committee is composed of four rural senators and four who hail from metropolitan Omaha.

The committee subsequently reached 7-0 agreement and 8-0 agreement on amendments to help meet some of the concerns that have been expressed by big cities and urban school districts. 

No school would receive less than one-third state funding support and no less than $4,000 in support per student under the amended proposal.

Every taxpayer would receive "a significant cut" in property taxes as a result of the plan, Linehan said. 

The overall goal is a 20 percent reduction in property taxes paid to K-12 schools. 

In other action, committee members generally agreed that they would oppose any Appropriations Committee decision to place the $55 million of increased state revenue anticipated by the latest Nebraska Economic Forecasting Advisory Board estimate into the state's cash reserve fund instead of directing it into the property tax relief fund.

That could set the stage for a floor battle between key legislative committees.

Following Friday's session, Linehan said she believes the committee made "significant progress" in fashioning a plan that can gain support on the legislative floor.

If the Legislature approves the package, or a revised version of the proposal, other changes still could be made in the 2020 legislative session before a possible vote in the November general election on an initiative proposal to enact a constitutional amendment that would provide a state income tax credit for 35 percent of local property taxes paid.

The petition drive was launched in 2018.

Still on the table for consideration by the Revenue Committee is action on a lengthy list of sales tax exemptions that might be eliminated in order to raise revenue for property tax reduction.

Some discussion on whether to refashion property tax reduction into a trust fund remained unresolved and Sen. Mark Kolterman of Seward served notice that he would like the committee to act on his proposal (LB720) to create a new state business tax incentive program to succeed the Nebraska Advantage Act, which expires in 2020.

At the outset of Friday's meeting, one committee member suggested his colleagues might want to consider the possibility of continuing to fashion a property tax reform package during the interim before the 2020 legislative session if they cannot reach agreement now.

But the ensuing collaborative discussion led by Linehan pointed to the prospect that they may be able to reach substantial agreement soon.

"I feel good about today," Linehan told her colleagues as they dispersed for the weekend.

The committee will meet in executive session again Monday morning.

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Reach the writer at 402-473-7248 or dwalton@journalstar.com.

On Twitter @LJSDon.

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